Finance Roll

Over the last 20+ years of helping people like you, and families like yours, find, qualify for, and own the home of their dreams, often with little or no money down and even with less than perfect credit, I have observed the spending habits and life styles of a large cross section of Americans. I have counseled first time home buyers, young upwardly-mobile professionals, generals, officers and enlisted personnel of all ranks and services, construction workers and DOT COM Millionaires. For decades, most middle class Americans felt like they were simply "Living the American Dream". What Does That Mean, you might ask? Was this Fact or was it Fiction?

For most middle class American families, living the American dream meant consumption not savings, with the thought that "he who dies with the most toys wins". Has this always been a bad thing? My answer, of course, would have to be that it didn't use to be! So, what changed you might again ask? Millions of Americans are now facing the daunting task of paying out more than they are taking in every month, How did this happen to them, and how could they have been so foolish? The truth for many is that they were paying their bills, were putting a little away for retirement, had good credit and were living the American dream. Others were simply living from refinance to refinance. They were paying off their deficit spending with the paper profits from the appreciation of their homes, and who can blame them? They weren't doing anything different than their deeply indebted government? These same Americans are now facing the realities of a collapsing economy and restricted credit. So what happened to the responsible people, the individuals and families with stable jobs, 401Ks, and good retirement programs? Many of these hard working responsible Americans have watched as good paying jobs have been systematically shipped over seas. First it was an outsourcing of manufacturing jobs. This was followed by factories, and entire industries moving overseas. Next came the loss of the white collar and technology jobs. This was followed by a virtual dismantling of America's manufacturing base through sweetheart trade deals. Last, but not least was the creation and issuance of a Worker Visa Program sponsored by your government. It was designed to import "Cheap Foreign Labor" that under cuts the remaining good paying jobs that were available to the middle class. This practice endorsed has been widely supported by the Corporate Elites of Business such as Bill Gates of Microsoft fame. They have even gone so far as to state there are No Qualified American Workers and have embraced the concept of Globalization as long as it supports their corporate profit agendas and have ignored and scoffed at this virtual destruction of the American economy.

You see, it has become a Global Environment for Big Business. Profit is everything, and the loss of American Jobs, income, retirements and even homes is simply below them. Let them eat cake rings out from the Heights of Corporate America and the Secret Halls of Political Power.

So Why All the Rhetoric; Is, this an article on Debt Reduction, or an Economic and Political discussion? The Answer is appropriately yes on all counts. You see, to properly embrace this problem you must understand its root causes and the fact that you are in it alone. "The Best Government Money Can Buy" will not bail you out. That Bail Out was reserved for Wall Street...not "Main Street". The 700 Billion Dollar Bailout was all the Graphic Proof needed by "Main Street" and a root cause of the Populist backlash that is now swelling against Wall Street, Corporate America, and Our Very Halls of Political Power.

Now I need to ask you some questions? Are you spending more than you're making? Are you on the debt treadmill with no end in sight? Do You Feel Trapped or Beaten?

Are you Mad? Don't Get Mad...Just Get Even!

This article is a first step in your process of understanding the problem, embracing the problem and creating a Strategy to "Help You Get Even" This is not a Bean Counters approach to debt reduction but a Strategy Session that helps you separate Facts from Fiction. It will help you define and focus on the specific steps you need to take to achieve your own measure of financial freedom and the Key to your "XTREME" Financial Makeover!

Stop the Madness!

What ever you are presently doing with your finances...STOP! Stop the Madness Now!

Isn't it a Fact that you didn't get in this position by making good choices...so stop whatever you are presently doing and look at all the ways you might be able to save money and reduce your monthly debts. When credit cards are maxed or out of control; if you're paying double or triple the minimum payment and seeing no real change, extreme debt calls for extreme actions. Spending is an addiction to many even when it's used to cover basic expenses.

What is Fact and What is Fiction? What Really Works To radically reduce your debt? Remove emotion from the buying decision and replacing it with good old common sense.

Fact: You must create a budget if you are to understand where you are and where you want to be. You have to create a plan, and a budget is simply spending your money with intention. When you create a budget, you are spending on paper, on purpose, before you go shopping or leave the house, your budget is your road map to your financial destination.

Fiction: I don't have time to work on a budget.

Fact: Debt is not a tool: It is a method used by banks to earn money. This consumer debt does not Benefit You!

Fiction: Debt can be used as a tool to leverage your assets and help you create prosperity. In spite of expert commentary by a host notables, it simply doesn't work that way for the rank and file.

Fact: Actual debt reduction solutions begin when you come to grips with your spending habits. True debt help is not easy, and it starts with your understanding. Start using cash or debit cards only. Put your credit cards in a locked drawer, Lock the keys in your safe deposit box.

Fiction I can solve my debt problems by simply moving things around, like switching our balances to low-interest cards. I can fix my debt problems with a simple phone call to a credit counseling service. These services will never correct the real problem, which is your behavior. Companies promising quick fixes are usually scams and can cause almost irreparable damage.

Fact: Debt consolidation is like using a band aid on an infection! It simply gives the illusion of fixing the problem. You can't borrow money to reduce debt! Debt consolidation is not only dangerous, but it is contagious. It treats the symptom leaving the habits that caused it unchecked.

Fiction: Debt consolidation is the solution to my problem.

Fact: Being covered in debt is more common than ever before, and being buried in debt is rampant.

The average person has between six and 10 credit cards; the average household carries about $10,000 in credit card debt. My personal small sample of mortgage customers indicates numbers many times this amount. In fact, I rarely see numbers this low, even for a single person.

Unfortunately, many Americans are simply in Denial. With today's classic credit denial being, that I have to charge because I can't live on what I'm making. They are watching their debt continue to spiral out of control. To make matters even worse, these same individuals typically have no Emergency Fund. You need at least one month's total cash flow in the bank for an emergency. They also won't have a retirement account because there is simply nothing left over at the end of the month to save. You have too much debt when you are switching your balances from card to card and at your current rate of payments if it will take more than 4 to 5 years to have all your debts paid off! Making your minimal monthly payments is not handling your debt. I ask you, is this, the American Dream?

Fiction: If can handle my debt, how can it be too much?

A Dirty Little Secret

You are a creature of habit. The longer you have been in debt, the more comfortable you are with it, and the harder it is to get rid of it! Money problems are primarily solved by lifestyle changes. To get out of debt, you must make hard choices that change the way you have been living. Real Change...means life style changes not just rolling debt from one card to another. It requires that you "Stop the Madness Now"!

Fact: Credit management services take a fixed payment from you and spread it around, to all your cards and usually to the satisfaction of no one. If you stick with this method long enough you may get out of debt, unfortunately your credit will be trashed.

Fiction: I know who can save me...I'll hire a credit counseling or debt management service!

Fact: Pay off your smallest debt first. This will create more cash flow which you can use to accelerate the pay off of the next smallest debt and so on and so on! Always pay your essential services first before any bills are covered as it does little good to be debt free living under a bridge or in a home with no utilities. Be sure to evaluate the options available to you regarding the settlement of high balance credit cards at less than the full amount. The same applies to renegotiating your mortgage through a Loan Modification Agreement from your lender. Sub Prime, High Interest Rate and A.R.M. loans are prime candidates for this form of relief. Stick to your guns...This Is All About You!

Fiction: I should pay off the debt with the highest interest rate first or I better pay these guys first because the squeaky wheel gets the grease.

Fact: Bankruptcy is a life changing and gut-wrenching experience. An experience that continues on long after the gavel has fallen.

Fiction: I'll just file bankruptcy and start over. It's Just That Easy"!

Your debt reduction hit list! What You Can Do Starting Today!

Extreme debt calls for extreme measures and "Xtreme" debt reduction means reducing the cost of everything we do and whenever the possible negotiating the balances on outstanding accounts. Ask Yourself How Can You Lower these monthly expenses.

-Living Expenses including the home that we live in.

Can you move to a more affordable home, rent out a room/basement, cut utilities by being more energy efficient?

-What car we drive and how many we have.

Selling a vehicle saves a payment, insurance, gas, And maintenance. Many people have started to car pool or commute during the recent gas crunch and are loving it

-Vacation or play time expense.

What are you doing spending money on toys or trips when you can't get out of debt?

Sell the motorcycles, boats, snowmobiles, and sports cars. Dump the premium cable package and every other Play Time Diversion.

-Public, or home school, can easily save you about $5,000 a year and that's for elementary and high school tuition! Private Schools are simply not in the budget!

- Negotiate a reduced pay off on your large high balance credit cards. I'm sure you have seen the ads on T.V. offering this option. You don't need an external service to do this. This option is available to those who are delinquent or find that their financial status has changed. If your house is now worth less than it was when you bought it, and you can't sell it because you don't have any equity, renegotiate your mortgage by working with tour lender to avoid foreclosure. A more affordable payment might also mean the ability to pay off your other obligations quicker.

Pay Cash: people who pay with cash spend less and even tip less. They save money because it's harder to part with the green than throw out the old plastic. No More Big Spender For You! Shift your priorities, scale back, modify your lifestyle choices, and did I Say...Pay cash or debit only!

Consider those little extras that you don't need. A Starbucks a day is about 5 Bucks. A pack of cigarettes is another 5 Bucks. A sit down lunch 20 bucks! Thirty bucks a day times 360 days in a year is $10,800 and that's after tax.

Go for a hike, walk around a lake, or go for a bike ride. Inexpensive and healthy options to saving money.

Sell Something: Have a garage sale, sell that extra car, motorcycle, boat, snowmobile etc. Do you really need those musical instruments you haven't played in the last ten years? What do you have to sell? Retirement Accounts: Don't Even Think About It! Don't cash in your retirement accounts...you're going to need them later.

This article is but the first step in your understanding of how you got to where you are at today. It is a glimpse of the choices you can make to rectify your past mistakes, and a clear vision of how you can look at your future! Don't Get Mad...Just Get Even!